Examining the role of Firm-based and Country-based determinants towards Banks Performance: A case of Pakistan

Abstract

The aim of my study is to determine the factors which affect the profits of the banking sectors in Pakistan. For the examination of whether our variables have a significant impact on the profit of the banks or not, the data was collected for the duration of 2010-2018. The data was gathered from the financial statement of the banks and the World Development indicator. A total of 17 commercial banks were selected. We apply on it the panel data analysis and find the result of the fixed and random effect. To get this object we bring the Return on asset as our independent variable. For the independent variables, we make our two factors. The first one is bank-specific and second is the country-specific. We find that the independent variables have shown a significant impact on the profitability of the bank. The variable Net interest margin, money, and quasi money have a significant impact on the profitability of the banks. The result exposed that the Net interest margin and the long loss provision over the total loss have a highly significant impact on the profit of the bank.